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Virginia Trust Co. v. Evans

March 10, 1952


Appeal from a decree of the Circuit Court of Bath county. Hon. Earl L. Abbott, judge presiding.

Present, All the Justices.


SPRATLEY, J., delivered the opinion of the court.

Arthur Thomas Kelly Evans, a resident of Bath county, Virginia, departed this life testate on May 21, 1948. His will was probated on June 10, 1948. On the same day the Virginia Trust Company named as executor in the will duly qualified as such and proceeded to administer the estate.

By his will testator made twelve specific bequests of his property, and disposed of the remainder by devising and bequeathing two-thirds to his nephew, Arthur Armitage Evans, and one-third to his nephew, George Evans. The will did not direct that any of the property be sold or not sold.

The final account of the executor showed receipt of personal property having a gross appraised value of $73,331.75. Included in the gross sum were 40 shares of Gastonia Coca-Cola Bottling Company stock, appraised at $50,000; 250 shares of Thompson-Lundmark Gold Mines, Ltd.; and 5,333-1/3 shares of Upper Canadian Mines, Ltd., both Canadian companies appraised at $8,952.92. Not included in the account were the twelve specific legacies delivered in kind to the named legatees, and about 300,000 shares of stock of twelve Canadian mining companies having little or no value.

Among the assets which came into the executor's hands were a bank balance of about $9,000 in the First National Bank of Atlanta, Georgia, a small balance in a bank in London, England, and some stocks, bonds and other property in Canada. The principal assets located in Canada were a $5,000 Dominion of Canada 3% bond, and a balance of $789.12 with the Bank of Nova Scotia. The Coca-Cola Bottling Company stock and the Canadian mining stocks were located in a safety deposit box in the Virginia Trust Company in Richmond, Virginia. The bank

balance in Canada, less cost of transfer to the United States, in the net sum of $732.48, was withdrawn by the executor, and the Dominion of Canada bond was sold for the net sum of $4,443.75.

According to the record, the testator's investment in the 40 shares of Coca-Cola stock was $3,000. There was no established market value for these shares, the Gastonia Coca-Cola Bottling Company being a closed corporation, with only 600 shares outstanding, of which the testator owned only one-fifteenth. During the five-year period prior to the testator's death, he had received average yearly dividends of $74 per share on this stock, that is, $2,960 annually. During the period of administration of the estate from January 1, 1949, to January 5, 1950, the executor received dividends thereon amounting to $8,400.

The executor requested the Gastonia Coca-Cola Bottling Company to furnish it with information showing the value of its stock for the purpose of inventory and appraisement. A representative of the Coca-Cola Company came to Richmond, and furnished the executor with the desired information, thereupon, in consideration of the established factors, a method of appraisement was adopted which produced the value of $1,250 per share. This appraisal was discussed with agents of the Federal Bureau of Internal Revenue, and an agreement was reached to adopt that value as a fair market value of the stocks for tax purposes. This was confirmed by the United States Treasury Department, and thereafter accepted by the tax authorities of the State of Virginia.

The representative of the Coca-Cola Company advised the executor not to sell the stock of his company. The residuary legatees were informed of all of the facts and the foregoing suggestion. Promptly thereafterwards, in June, 1948, the residuary legatees requested distribution and delivery of the Coca-Cola, Thompson-Lundmark Mines, Ltd., and Upper Canadian Mines, Ltd., stock to them in kind. Distribution and delivery were accordingly made.

In the settlement of its final account before the commissioner of accounts of Bath county, the executor charged 5% commission on $73,331.75, the gross appraised value of the estate, which amount included $58,952.92, the appraised value of the stocks delivered in kind to the residuary legatees. It also charged $40.83 for interest on money advanced to the estate to pay the specific legacies before the expiration of one year after the death

of the testator. The commissioner refused to allow 5% commission charged on the value of the stock delivered in kind; but approved an allowance of 2 1/2%, or the sum of $1,473.82 instead of $2,947.64. He further refused to allow the interest charge on money advanced by the executor. The total commissions charged by the executor were $3,666.59 and the amount allowed by the commissioner was $2,192.77.

A 5% commission was originally charged on a portion of the specific legacies delivered in kind; but upon refusal of the commissioner to approve such allowance the claim for the charge was withdrawn, and is not in issue here.

The executor excepted to the actions of the commissioner, and thereafter the matter came on to be heard in the Circuit Court of Bath county. On December 19, 1950, the circuit court overruled the exceptions, and being of opinion, for reasons stated in a written opinion, made a part of the record, approved and confirmed the report of the commissioner in all respects. The executor was ordered to pay to the estate the sum of $1,473.82, also the sum of $40.83, charged as interest on sums advanced by the executor to the estate, and to pay personally the cost of this proceeding.

The Virginia Trust Company specializes in the administration of trusts and estates. It is staffed by a capable personnel of trained experts and professional employees. It satisfactorily obtained by correspondence the transfer of the foreign assets to Virginia, in compliance with government regulations, without loss. It prepared and filed the necessary State and Federal returns for income, inheritance and estate tax purposes. It paid all funeral expenses, debts, all specific legacies, and delivered in kind the 40 shares of Coca-Cola stock and the Canadian mining stocks to the residuary legatees.

The main question for our determination is the right of the executor to receive 5% commission upon the appraised value of the stock in kind delivered to the residuary legatees. The disallowance of the small charge for interest and the question of costs are secondary.

The law in Virginia regarding a fiduciary's right to compensation is stated in section 26-30, Code, 1950, (ยง 5425, Code 1919) as follows:

"The commissioner, in stating and settling the account, shall allow the fiduciary any reasonable ...

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